This is an older blog post, you will find one on more recent data here
These interactive presentations contain the latest oil & gas production data from all 24,232 horizontal wells in the Eagle Ford region, that have started producing from 2008 onward, through December 2019.
December oil production was up slightly from the previous month, but down year-over-year. Almost 2,000 wells were completed last year, a similar level as the year before (2,168).
On average, well productivity did not change last year compared with the previous year, as you can find in the bottom chart of the “Well quality” tab.
The overall output from the top operators and the location of their wells are displayed in the “Top operators” view. EOG, the number 1, produced 260 thousand bo/d in this basin, exactly the same volume it did 5 years earlier. It increased again in January, based on preliminary data available in our subscription services.
The ‘Advanced Insights’ presentation is displayed below:
This “Ultimate recovery” overview reveals the relationship between production rates and cumulative production. Wells are grouped and averaged by the year in which production started.
If you group the wells by quarter (or month) you will see more granular and recent data. You will then also see that well results haven’t improved since Q4 2017.
In this screenshot, taken from ShaleProfile Analytics, you can see how well performance has changed in the last couple of years in the top-4 counties (based on well results) in the Eagle Ford, measured by the cumulative oil recovered in the first year:
Early next week, we will have a new post on all covered states in the US. We will then also announce a new dashboard, which we believe is very relevant for the current market situation: it will show production forecasts based on different rig count assumptions.
Production and completion data is subject to revisions, especially for the last few months.
For this presentation, I used data gathered from the following sources:
- Texas RRC. Production data is provided on lease level. Individual well production data is estimated from a range of data sources, including regular well tests, and pending lease reports.
The presentations above have many interactive features:
- You can click through the blocks on the top to see the slides.
- Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
- Tooltips are shown by just hovering the mouse over parts of the presentation.
- You can move the map around, and zoom in/out.
- By clicking on the legend you can highlight the related data.
- Note that filters have to be set for each tab separately.
- The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
- If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.
When I started work at a major oil company in 1985, I was tasked with generating recommendations to management for approval for any investments which met their investment hurdles. This involved incorporating available technical data and tools and research of historical records associated with the assets under my position.
This work led to the well record file room, a 10,000 square foot basement room stacked from floor to ceiling with records associated with the wells drilled in our District. Reading these records, I gained increased admiration for the reservoir engineers who were then senior level managers of our company. Some were WWII and Korea Veterans, and most of their correspondence was generated when they were in an equivalent staff position to mine, in the late 50s and early 60s.
Their time was not a good one for the industry as oil prices generally ranged from $2.50- $3.50 until the 1973 oil embargo. What was fascinating to read were the discussions centered around whether a contemplated project was an “acceleration” project or a “reserve development” project. Only those projects which were determined to actually develop new reserves rather than simply accelerate existing recovery were worthy of investment. It was their job to convince management that a proposal was something not that simply met their investment hurdles, but would actually increase the ultimate recovery beyond the existing development scheme.
The reason to bring this up now is I feel the reservoir engineers in this industry have dropped the ball. We were always considered to be the adults in the room, the mature ones ensuring that the stakeholder’s capital was only deployed in those endeavors which generated a significant return ON investment. Not simply a return OF investment.
This necessitates incorporating technical data combined with the application of specific expertise into the development of a projected recovery schedule for a specific undertaking. The technical data includes well log, core, PVT, pressure transient, etc, which to my knowledge is not widely acquired or available for any of the non-conventional plays. The specific expertise is acquired in the Petroleum Engineering curriculum of any one of the fine worldwide institutions of higher learning offering such, and is more than becoming an Aries “tech” who runs “engineering” economic projection software and thinks it was brought down from Mt. Sinai, with their little league participation trophy.
One can’t know, but thinks the WWII managers would not have done this. By this meaning not applying technical data in any way shape or form to high grade or condemn drill-sites, not worrying about whether anything was simply acceleration or reserve development, and generally not employing any of the specific expertise your training provided to police the crisis it created. If all you do is chase hot production and rely on the service companies research to design the newest well completion, there is no need for you.
If the nonconventional players could have practiced some discipline based on technical justification and drilled half the wells and got 75% of the production it would have been fine. If you’d have done this, you wouldn’t have had to drill $10MM wells and triple the number of stages and run submersible pumps to create flashy ninety IPs and then slap the older more conservatively managed wells declines on that to create your fake power points. We would have had 3 MMBOPD less at half the cost and half the decline. We’d have $80 WTI and there would have been room for everyone.
All of this is a petroleum reservoir engineering failure, the greatest of all time. Belongs on the Discovery Channel’s Engineering Disasters. Am I pissed? You bet. Am I ashamed of my profession of 35 years? Definitely. That doesn’t matter. But you finally pissed off the people who could do something about it. You think the great reservoir engineers at Aramco don’t understand all of this? You think they don’t have the King’s ear? You know they do.
We come out the other side of this, get your shit together. Show some leadership and instead of producing powerpoints that project “what will never be from what never was”, start outing people who are drilling shit and screwing the investors. Inside your company and out. These plays should be mature enough for you to make that discrimination. If not, like the Virus in absence of a vaccine, we’ll find ourselves right back in the same spot. It is your job to flatten the curve. In short, re-assert your place as the adults in the room, like your 1950’s and 60’s forefathers did.
Considering the basin’s prolific resource base, how can Eagle Ford operators make a strong comeback and sustain their economics irrespective of the price cycles they are in? What can operators learn from their and peers’ underperformance (in terms of well productivity)? To what extent has their performance been affected by their beliefs (i.e., about location or formation quality)?